Minister has to make good on pledge
JUSTICE Minister Alan Shatter has promised to revisit the laws on personal insolvency if it is found that banks are not co-operating and the new laws are not working.
Mr Shatter (pictured) made this statement as far back as December last year.
Well, now that the new Insolvency Service of Ireland has finally started operating Mr Shatter may have to make good on his promise.
It is becoming increasingly clear that two major flaws of the new system, long signalled by campaigners for debtors, are set to render the service impotent for most people.
The banks have no interest in co-operating with the new process as it implicitly means writing off debts.
That much was admitted by the bankers who gave evidence recently before the Oireachtas Finance Committee. And it is becoming plain for all to see that the way the ISI process has been constructed means that it will effectively operate as a bailout for buy-to-let investors.
Head of the service Lorcan O'Connor admitted that broke families that have no income and no assets they can sell off will be unable to avail of the new deals.
Now a 104-page research paper by legal expert Keith Farry has exposed huge flaws with the design of the Insolvency Service of Ireland.
The cost of engaging a personal insolvency practitioner and the fact that banks can claw back any profit on the sale of a home up to 20 years after an insolvency deal mean that the new system is unlikely to work.
Time for Mr Shatter to go back and re-examine his legislation.